Opinions vary on how crisis will affect OFW remittances

Published by rudy Date posted on December 10, 2008

WASHINGTON – Will the global economic crisis cause a sharp drop in worker remittances to the Philippines in 2009 or will the country be immune to the downturn?

Ryszard Cholewinski, a labor specialist at the International Organization for Migration (IOM) said the flow of remittances to developing countries which depend on overseas workers to keep their economies afloat could decline by up to nine percent because of the global slowdown.

The Washington Times in a report from Geneva quoted him as saying the gloomy economic outlook could dry up jobs in sectors that rely on migrant workers, such as construction — especially in oil-rich Persian Gulf nations — manufacturing, hospitality and tourism.

Cholewinski said the fall in remittances will heavily affect developing countries, including Mexico, the Philippines, India and Bangladesh.

The flow of remittances to these developing countries, currently estimated at about $283 billion, could decline by up to nine percent, he said.

But The Wall Street Journal in a report from Manila on Monday said for now the Philippines appeared well-positioned to ride out the current economic storm.

“Unlike some countries that are heavily dependent on remittances, the Philippines’ expatriates are more likely to be filling professional roles in the fields of education and health care which economists see as less vulnerable to layoffs during a recession,” the Journal said.

The World Bank in a recent report said countries whose migrants are employed in cyclically sensitive sectors such as construction may be relatively more vulnerable to downturns.

The Journal said the profile of overseas Filipino workers (OFWs) has steadily evolved over the years to skilled professionals in the US and Europe and that‘s one reason the World Bank and some investment banks are relatively sanguine about the Philippines’ prospect.–Jose Katigbak, STAR Washington Bureau

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